A civic-corporate partnership in Iowa is the latest salvo in the insurance industry’s war on its stodgy reputation in the technology world.
Seven insurance companies and the Greater Des Moines Partnership have joined to kick off the Global Insurance Accelerator, a Silicon Valley-style initiative to bring next-generation technology to market fast. In this case, each of the six startups that will receive capital and mentoring services from insurance technology professionals is working on technology that promises to take the business of insurance to the next level.
Modeled after the Techstars accelerator program in Boulder, Colo., the goal of the Des Moines initiative is to foster innovation in one of the region’s largest industry sectors insurance and establish the area as a fertile area for all startups.
“We’re excited about the potential innovation that the accelerator can bring to the insurance industry,” says Doug Fick, VP and CIO of U.S. Insurance Solutions for The Principal Financial Group and a board member for the accelerator. “We’re also excited that it’s located here in Des Moines.”
[Meet the startups: 6 Insurance Startups to Watch]
The Principal’s involvement began last year after the company was approached by the Greater Des Moines Partnership. It was one of the first three insurance company investors, along with American Equity Investment Life Insurance Company and Delta Dental of Iowa. Since then, four more insurance companies in the region have joined to pool money and delegate executives to serve as mentors to the startups. The other carriers are:
- Farm Bureau Financial Services
- Farmers Mutual Hail Insurance Company
- Grinnell Mutual Reinsurance Company
- The IMT Group
The entire operation is overseen by managing director Brian Hemesath, an Iowa native who has been involved in the startup scene in Des Moines for more than 15 years. He took over management of the accelerator late last year.
Hemesath was selected because of his experience working with nascent tech companies (“I told them that I don’t have any insurance experience besides being a consumer of it, and they replied, That’s OK,’” he says). He has been involved in the very early stages of eight ventures building scalable technollogy in the retail, event management and communications industries, and is now bringing that experience to insurance.
Hemesath was involved in an incubator in the past, but notes that an accelerator is meant for a more advanced product.
“An accelerator is post-concept: We’ve got an idea, what we really need is some advice and a place to set up camp,’” he explains. “Some of our groups have even been through an accelerator before.”
The inaugural class of six startups includes companies from Iowa and Omaha, Nebraska; as well as San Jose, Calif. and as far away as Brazil and Berlin, exploring telematics, wearables, distribution, and more. Each has received $40,000 in seed funding from the pool and has to create a minimum viable product for demonstration at the Global Insurance Symposium in Des Moines at the end of May.
“The symposium’s going to be fantastic,” Hemesath says. “We want them to be investible, and to be customer ready -- tell a good story, show off the product.”
The money is nice, but for the insurance-focused entrepreneurs involved with the startups, the real value is in the mentorship, says Hemesath.
“The real strength of the program is 70 and climbing mentors that we have they come from all aspects of the insurance business, including some CIOs,” he says. “We’re only in day four and the startups are already thrilled.”
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